USA Nonprofit Staff Cost Allocations

[barney8792]

Hello!

In nonprofit accounting, how should grant reporting costs be allocated? Our funders require that we write progress reports about our activities funded by their grants, as well as submit budget vs actual spending reports. Should staff time spent writing these reports be considered a program expense or an indirect administrative expense?

The reports themselves do not advance the mission of the organization or directly contribute to success of the programming. They are just neccessary management activities, which makes me think they are indirect expenses. But, the time spent writing them can be tracked relatively easily and attributed to a specific grant/project, making me think they are program expenses.

 

[kirby]

https://www.urban.org/sites/default/files/publication/58831/1000655-Is-Grant-Proposal-Writing-a-Fundraising-Expense-.PDF

Article cites IRS rules on your topic

 

[barney8792]

https://www.urban.org/sites/default/files/publication/58831/1000655-Is-Grant-Proposal-Writing-a-Fundraising-Expense-.PDF

Article cites IRS rules on your topic

Thanks Kirby! I am familiar with the rules around grant proposal writing but I am wondering about grant report writing. We are required by our funders to write reports summarizing the work we have done and that takes a significant chunk of staff time (i.e. money) to do that for all our grants. So I am wondering if that staff time is programmatic or indirect, given that most funders don't give space in their budgets to ask for funds to pay someone to maintain grant compliance (i.e. writing summary reports, etc).

 

[kirby]

I am finding nothing on this on the Web. Suggest you contact a nonprofit similar to yours and ask their in-house accountants what their policy is.